N.Y. Medicaid program to get $138M from settlement

New York’s Medicaid program is line to get more than $138 million as its share of a $1.6 billion settlement among Johnson & Johnson, J&J subsidiary Janssen Pharmaceuticals Inc. and state and federal governments, state Attorney General Eric Schneiderman said Monday.

The settlement follows investigations by a national Medicaid fraud team jointly led by members of the attorneys general’s Medicaid fraud units in New York and Massachusetts. The units investigated the drug makers’ promotion of the anti-psychotic drugs Risperdal and Invega for unapproved uses.

Both drugs are approved for treatment of schizophrenia and bipolar disorder but can be harmful to children, adolescents and elderly patients.

Federal prosecutors and states contended in four whistleblower lawsuits filed in a Pennsylvania federal court that J&J and Janssen made false claims about the safety and efficacy of Risperdal, and paid illegal kickbacks to get doctors and long-term care pharmacies to dispense the drug to unapproved patients.

The settlement includes $1.2 billion in civil damages and penalties marked as compensation for Medicaid, Medicare and other government programs. Terms call for Janssen to plead guilty to violations of the U.S. Food, Drug and Cosmetics Act and to pay $400 million in criminal fines and forfeitures. Some $536 million is earmarked to compensate state Medicaid programs.

“Parents of children with hyperactivity disorders and other vulnerable patients should be able to trust their doctor’s advice without fear that drug companies are manipulating their physician’s judgment,” Schneiderman said.